I have said it time and time again and without shame that Dave Ramsey is my role model and benchmark when it comes to my finance advocacy

What makes Dave Ramsey really good is his straight-to-the point and no-nonsense approach with personal finance. Here’s a great video on why we should start looking at money differently and go against what the world has been teaching us. It’s time to go against the normal!

Like Dave, I believe the bible holds the answers to our many financial questions… as well as all the other questions we have in life.

A lot of emphasis has been made towards growing your wealth by investing it, something I totally agree with. Investing properly can maximize your savings and when properly undertaken, it should amount to something substantial in the future.

However, the issue on saving money has always been relegated as something that is so basic that it is assumed that everyone knows how to save… but do we? Us Filipinos continue to have very low savings despite that drastic improvement of the economy and our income. In my travels to teach Filipinos not only here but abroad, I am a witness on how low our savings are and how little emphasis we put on savings. When you ask people if saving is important, everyone will agree with you that it is – however, their bank accounts will say otherwise.

Why is it so hard for us Pinoys to save? The culprit is the way we spend. Unfortunately, we have developed a liking towards too much consumerism that many of us have developed a spending problem. People do not save because they spend more than what they should. I know that it may be an overly simplistic statement but that is the hard truth! While I agree that many of us are finding it difficult to save because of low income, there are also many of us with above-average income who still find it difficult to save.

Proper spending will lead to proper savings. When we take charge on the way we spend, savings will automatically follow. Not all spending are the same and we often hear about needs and wants. Yes, that is a very basic concept but it is truly fundamental. Spending on needs is hardly pleasurable – do you know anyone who is excited paying his or her bills? However, spending on our wants will always give us the warm feeling inside, even if it is momentary. Without proper control, our spending on wants and not on needs often causes us a lot of financial problems and in most cases, it can cause us to be in debt.

Here’s a simple tip to get those spending in check –- create and stick to a budget! Again, an overly simplistic approach to personal-finance but it is so important that the foundation of all our financial goals should start with our ability to control the amount of money that leaves us. A budget will do wonders to our financial future because if we are aware of our spending, we can control it better. Dave Ramsey says “before spending paper, spend it on paper” – that’s what budgeting is all about. It is best for you to identify your expenses and start allocating for them properly. Include your want spending in your budget too because everyone needs to spend on something that will give us that warm feeling inside too. Just make sure that your ‘want’ spending has a limit and that you do not go over that limit.
When you know how much you need to spend, including your ‘wants’, you can save better and more consistently. When preparing your budgets, make sure that there is enough money left for savings – you can use a certain percentage as a minimum for savings, like 20% of your income and build on from there.

For those of us who have a difficulty of setting aside an amount of money for savings regularly, I suggest you enroll in an auto-debit arrangement with your bank and make sure that you do not touch that account, otherwise your savings will not grow. When you have built up enough savings, which you can also use as your emergency funds, you can now begin to invest your money to build on your wealth.

Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it. – Proverbs 21:20, ESV

I’m starting a series of blogs about questions in the mind of many of my readers. I will try to answer all the questions in short form and post it in this blog site.

The first question was asked by Ray Cuta via Facebook:

Question:  What are your top 10 personal finance book?

Hi Ray.

A few months ago, I wrote about the top books I recommend in my Inquirer column but it’s not 10 books. Let me put those books I recommended in the column plus others to make it 10. Personal Finance books are really helpful but not all are really sound. The following books are those that I personally like:

1)      Total Money Make Over by Dave Ramsey – I love this book as it is a no nonsense book on helping us get on the right track. It is instructional and very sound financial advices.

2)      Financial Peace by Dave Ramsey – Yes I am a Dave Ramsey fan and for a good reason. This book lays the foundation of achieving real financial security – very basic and yet very real.

3)      Pwede Na! The Complete Pinoy Guide to Personal Finance by Efren Cruz – This for me is the best personal finance book written by a Filipino. Very concise and yet full of information. What makes me like this book a lot is that it is written in the Filipino context.

4)      Pwede Na! The Complete Pinoy Guide to Retirement & Estate Planning by Efren Cruz – the follow-up book when you are ready to grow your money and plan your estate. I also like this book because it is factual, concise and written in the Filipino context.

5)      Millionaire Next Door — by Thomas J. Stanley and William D. Danko. This is an iconic book that discusses the behavior of Millionaire in the USA. It is not only insightful, it will actually shatter many of our misconception on wealth and wealth accumulation. I particularly like this book because it is based on solid research. This is a good financial behavior book that may help you make a paradigm shift.

6)      Automatic Millionaire by David Bach — this book by a best-selling author gives you an overly simplistic view on achieving wealth and yet it is effective in its message that in eating an elephant, we need to do it one bite at a time. Simple, practical and sensible. If you think you can never be wealthy, read this!

7)      Money Matters by Larry Burkett — Financial counselling is the most effective route toward achieving financial security but many do not have access to good financial counsellors or advisors. Money Matters is a form of counselling book and I like the question-and-answer format. The questions are very practical and real, not superfluous or ambivalent. The answers of Mr. Burkett are successful in providing advice in an emphatic way; yet, you will find that his answers have sound financial grounding.

8)      Till Debt Do Us Part by Chinkee Tan — another book written by a local author that I highly recommend. Chinkee’s book deals with an issue that plagues many Filipinos and yet one that is hardly discussed openly. The author successfully convinces the reader that debt is not a good thing and yet it gives us hope that being truly debt-free is within the reach of the average Pinoy. I like the practical steps in finding a solution to the debt trap written specifically for the Pinoy psyche. Chinkee has written many best-selling books but Till Debt Do Us Part remains to be my favorite.

9)      The Richest Man in Babylon by George Samuel Clason – A former boss of mine gave me this book in 1994 and probably the first finance book I ever read. I did not read it immediately as I am not fond of fiction but boss insists I read this one. The writing style was great but the message of the book was even greater. It’s all about doing the right things and very fundamental in nature.  This book is full of financial wisdom.

10)   The Bible – Yes, the written word of God is also an awesome finance book. Did you know that the offers 500 verses on prayer, less than 500 verses on faith, but more than 2,000 verses on money and possessions. 16 of the 38 parables were concerned with how to handle money and possessions and Jesus talked a great deal about money. The wisdom you will get from reading the word of the Lord will not only make you a better believer, it will also make you a better steward. Pick up the Bible and experience it for yourself.

There are many more books you can read and I’m sure there are those that will be your personal favourites. Just remember when reading a book – pick up the good things and discard that bad ones as no book is perfect; except the Bible.

Happy reading!

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